Srinagar: The High Court of Jammu & Kashmir and Ladakh has dismissed a writ petition filed by Mohammad Ishaq Pampori and his family, refusing to interfere with J&K Bank’s SARFAESI proceedings against their mortgaged property.
A Division Bench comprising Acting Chief Justice Sanjeev Kumar and Justice Mohd. Yousuf Wani held that the dispute over the premature termination of a lease agreement between the petitioners and the Bank had “no nexus or direct relation” with the loan transaction secured by a separate mortgaged property.
The Court observed that the lease agreement and the loan arrangement were “distinct and independent” contracts and that the adjustment of rent towards the loan account did not make the lease agreement part of the loan documents. It further held that “the loan transaction is quite different and completely independent of the lease agreement.”
Rejecting the petitioners’ plea to halt recovery proceedings until the civil suit over the lease is decided, the Bench held that once the loan account had turned NPA, “the Bank is well within its rights to proceed under the provisions of the SARFAESI Act. This is exactly what has been done by the respondent-Bank.”
The Court declined to examine the validity of the lease termination, observing that the issue is already pending before the civil court and “we deem it appropriate not to comment on the issue on merits lest it may prejudice the rights of the parties.”
Finding no legal infirmity in the notice issued under Section 13(4) of the SARFAESI Act, 2002, the High Court dismissed the writ petition while clarifying that its observations would not affect the pending civil proceedings concerning the lease agreement.
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